Malaysia’s Prime Minister Mahathir Mohamad who came to power in elections last month announced that he will cancel a proposed multibillion-dollar high-speed railway link to Singapore, scrapping a signature project of his predecessor Najib Razak in what he called a move to cut costs.
But ending the project will take time as it requires negotiation with Singapore. The city-state’s transport ministry as of now has not received any official notification from Malaysia, adding that both sides had agreed to proceed with the high-speed rail link “based on mutual benefits.”
The decision would deal a setback to construction and rail companies in Asia, including those from China and Japan that were keen to gain a slice of orders. The 350-kilometer (220-mile) line, with trains moving at a top speed of more than 300 kilometers an hour, was targeted to begin operating in 2026. It would’ve trimmed the land journey between Kuala Lumpur and Singapore to 90 minutes, from about five hours now.
The project had attracted interest from many companies in Asia and Europe. While Korea Rail Network Authority and a group of South Korean companies won the reference design consultant contract, Chinese firms led by China Railway Signal & Communication Corp. and CRRC Corp., Siemens AG, Alstom SA and some Japanese conglomerates are among those in the race for the project.
Genting Sentosa will have no impact on this new decision
Last month in May Samuel Yin Shao Yang an analyst at Mayban IB Research in an email response to GGRAsia announced that Malaysia’s decision to scrap an expensive high-speed rail link between its capital Kuala Lumpur and the neighbouring city-state of Singapore will not have a negative impact on Genting Hotel Jurong, a facility built by Genting Singapore Plc to support its operations at casino venue Resorts World Sentosa
Genting Singapore had a first-phase opening in April 2015 for the 557-room hotel, located approximately 15.4 kilometres (9.6 miles) from Resorts World Sentosa on the Singapore side of the border. Some commentators queried the decision to build fresh sleeping accommodation so far from the resort and to bring those guests in by bus.
But Mr Yin had pointed out at the time that the location at Jurong Lake was close to the proposed terminal for the rail link, at Jurong East. Many customers of Singapore’s two casino venues – Resorts World Sentosa, and Marina Bay Sands, the latter promoted by Las Vegas Sands Corp – are said to come from neighbouring Malaysia.
Maybank’s Mr Yin told that regarding Genting Hotel Jurong in the aftermath of the rail link cancellation: “I am not overly concerned that it will be a white elephant.”
“Genting Hotel Jurong is located in between the second link bridge [to Malaysia] and Resorts World Sentosa. Many tour buses from Malaysia would pass Genting Hotel Jurong anyway. In short, I think the hotel will still be viable in the long run,” he added.
Malaysia’s 92-year-old prime minister, Mahathir Mohamad – who returned to power in a general election in early May, amid disquiet about the management of the economy under the leadership of his predecessor Najib Razak – said that the rail link would have cost his country MYR110 billion (US$27.6 billion) and “would not earn us a single cent”.
Malaysia and Singapore had signed a deal in 2016 to build the railway
The development will alarm the Singapore government, which is watching to see whether the return of Mahathir — whose relationship with the city-state was famously prickly during his first stint as premier from 1981-2003 — might cause ties to worsen.
The neighbors have had a difficult relationship since Singapore was expelled from the Malaysian Federation in 1965 over ethnic issues, and relations in subsequent decades were punctuated by occasional bickering.
When Mahathir was first prime minister, rows blew up frequently over everything from water — Singapore gets its water supply from Malaysia — to the Malaysian leader’s plan to build a bridge connecting the neighbors to replace the current causeway. The project never took off. But under Najib, who was accused of overseeing the plunder of state coffers, relations had been warm.
Companies had started submitting bids for the 350-kilometer (217-mile) line, which was scheduled to be completed by 2026. Currently, most people take a flight of around an hour between Singapore and Kuala Lumpur, on what is the world’s busiest international air route.
No official assessment of the railway’s cost had been made public but analyst estimated in 2016 cost as high as $15 billion.
Mahathir has said that Malaysia’s debt had ballooned to more than one trillion ringgit ($251 billion)under Najib, and he would review projects agreed under his predecessor. Also he had said that his government was renegotiating the terms of a Chinese-funded $14 billion rail link traversing peninsular Malaysia.
Najib was ejected from power by voters disgusted at corruption allegations surrounding sovereign wealth fund 1MDB. The ex-leader, his family and cronies are accused of stealing billions of dollars from the fund and using it to buy everything from high-end real estate to artworks. Najib, who has been banned from leaving the country and questioned over the graft allegations since losing power, and 1MDB deny any wrongdoing. (Inputs from various news sources)
Where is Sentosa?
Sentosa is a popular island resort in Singapore, which receives some twenty million visitors per year. Attractions include a 2 km (1.2 mi) long sheltered beach, Fort Siloso, two golf courses, the Merlion, 14 hotels, and the Resorts World Sentosa, featuring the theme park Universal Studios Singapore.
The name Sentosa translates as “peace and tranquility” in Malay, which was in turn derived from the Tamil term Santosha, meaning “contentment, satisfaction”. Sentosa was formerly known as Pulau Blakang Mati which in Malay means the “Island of Death from Behind”.
The island has an area of close to 5 km2 (1.9 sq mi). It lies just half a kilometre (a quarter of a mile) away from the southern coast of the main island of Singapore. It is Singapore’s fourth largest island excluding the main island. 70% of the island was covered by secondary rainforest, the habitat of monitor lizards, monkeys, peacocks, parrots as well as other native fauna and flora, also, when the construction of Resorts World Sentosa commenced, environmental impact was kept at a minimum when over two hundred trees in the designated area were replanted elsewhere on the island.